If you’re looking to finance a home improvement project, two lenders you may come across are Hearth and GreenSky. Both offer loans for a variety of home projects like kitchen remodels, bathroom upgrades, roof replacements, and more.
However, there are some key differences between the two that are important to understand before choosing a lender.
A Brief Comparison Table
| Features | Hearth | GreenSky |
| Loan Amounts | $2,000 to $200,000 | $1,000 to $65,000 |
| Interest Rates | 6.99% to 26.99% | 0% to 18% |
| Loan Terms | 3 to 20 years | 6 to 144 months |
| Minimum Credit Score | No minimum, soft check | 620 |
| Eligible Projects | All home renovations | Approved contractor projects only |
| Origination Fees | None | 0% to 18% of loan amount |
| Application Process | Apply online first, lender match | Starts with contractor |
| Funding Time | As soon as 1 business day after approval | As soon as 1 business day after approval |
Overview Of Hearth
Hearth is an online marketplace that connects homeowners with lenders that provide home improvement loans. When you apply for a loan through Hearth, they match you with a lender that offers rates and terms that fit your financial situation.
Some key things to know about Hearth:
- Loan amounts from $2,000 to $200,000
- Fixed interest rates from 6.99% to 26.99%
- Loan terms from 3 to 20 years
- Zero origination fees
- Fast online applications with instant decisions
- Funding as soon as next business day after approval
Hearth loans can be used for all types of home renovation projects, including kitchen and bathroom remodels, additions, flooring, windows, roofing, siding, and more.
Overview Of Greensky
GreenSky is a financial technology company that directly provides home improvement loans. They partner with contractors in various fields like HVAC, windows, roofing, and more to offer financing to their customers.
Key facts about GreenSky loans:
- Loan amounts from $1,000 to $65,000
- Interest rates from 0% to 18%
- Loan terms from 6 to 144 months
- No prepayment penalties
- Minimum credit score of 620
- Fast funding in as little as 1 business day
GreenSky loans can only be used for improvement projects completed by approved contractors within their network. Eligible projects include roofing, siding, windows, doors, HVAC, and solar panel installation.
Comparing Loan Terms
When it comes to loan terms, there are some clear differences between Hearth and GreenSky:
Loan amounts – Hearth offers higher maximum loan amounts, up to $200,000 compared to GreenSky’s $65,000 limit. However, GreenSky’s minimum loan amount of $1,000 is lower than Hearth’s $2,000.
Interest rates – Hearth’s interest rates span a wider range, from 6.99% to 26.99%, while GreenSky’s rates fall between 0% to 18%. Both lenders offer fixed rate financing.
Loan terms – Hearth allows 3 to 20 year loan terms, while GreenSky has shorter terms of 6 to 144 months (12 years). So Hearth provides more flexibility for lengthy projects.
Credit score requirements – GreenSky has a higher minimum credit score requirement of 620 compared to Hearth’s soft credit check that accepts scores under 600.
Fees – A major benefit of Hearth is no origination fees, while GreenSky charges an origination fee of 0% to 18% of the loan amount.
Eligible projects – Hearth funds all home renovation projects while GreenSky only finances improvements made by contractors in their network.
Pros And Cons Of Each Lender
Now let’s dive into the main pros and cons of both Hearth and GreenSky loans:
Hearth Pros
- Soft credit check won’t hurt your score
- No origination fees
- Higher maximum loan amount ($200,000)
- Longer repayment terms (3-20 years)
- Funds all types of home improvement projects
Hearth Cons
- High minimum interest rates (6.99%)
- Not available in all states
- Won’t finance DIY projects
- Lengthy application process
GreenSky Pros
- Lower interest rates (as low as 0%)
- Minimum credit score requirement is 620
- No prepayment penalties
- Fast funding in 1 business day
- Seamless application with contractor
GreenSky Cons
- Only funds projects with approved contractors
- Lower maximum loan amount ($65,000)
- Requires good credit (620+ score)
- Origination fees from 0% to 18%
As you can see, each lender has its own strengths and weaknesses that are important to weigh based on your specific financing needs and situation.
Also Read: Comparison Between Pulte Homes And Toll Brothers.
When To Use Hearth Vs. Greensky
Based on their differing loan features, here are some guidelines for when Hearth or GreenSky may be a better option:
Hearth loans are ideal if you:
- Have lower credit score or limited credit history
- Need to finance major home renovation over $65,000
- Want loan terms longer than 12 years
- Are completing DIY projects or using any contractor
GreenSky loans work best if you:
- Have good credit score above 620
- Need smaller loan amount under $65,000
- Are comfortable with higher monthly payments of shorter loan terms
- Are using a contractor within their network for the project
Neither lender is categorically better than the other. You just need to consider your specific financial situation and project details to decide if Hearth or GreenSky offers better rates and terms for you.
Also Read: Comparison Between Floor & Decor And Home Depot.
Hearth And Greensky Loan Application Process
Both Hearth and GreenSky aim to provide fast and easy loan applications that can be completed fully online. Here is an overview of what to expect during the application and approval process with each lender:
Hearth application process:
- Complete online application with personal and financial information
- Hearth conducts soft credit check but doesn’t affect your credit score
- If approved, you can review customized loan offers from multiple lending partners
- You select the loan offer that best matches your needs
- Hearth facilitates loan documentation between you and the lender
- If approved, you receive funding as soon as the next business day
GreenSky application process:
- Start application with approved GreenSky contractor online or in person
- Provide your credit information and loan details to contractor
- GreenSky conducts hard credit inquiry that shows on your credit report
- Get decision within seconds and review loan terms if approved
- Sign loan agreement with GreenSky
- Contractor completes project and GreenSky provides funding to them
While GreenSky has a shorter application process, Hearth allows you to shop different loan offers without affecting your credit.
Tips For Getting Approved
Here are some tips to improve your chances of getting approved for a home improvement loan with Hearth or GreenSky:
- Have a minimum credit score of 600 for Hearth, 620 for GreenSky
- Lower your credit utilization ratio below 30%
- Pay down existing debts to reduce monthly obligations
- Verify there are no errors on your credit report
- Be prepared to provide home value and renovation project details
- Have consistent income that covers the new loan payment
- For GreenSky, apply with an approved contractor for their financing
Meeting these criteria shows lenders you are financially responsible and ready to take on a home improvement loan.
Also watch this about Hearth!
Frequently Asked Questions (FAQ)
Yes, GreenSky is a reputable company and one of the largest point-of-sale lenders for home improvement projects. They have provided over $30 billion in financing since being founded in 2006.
GreenSky approvals are dependent on having a minimum 620 credit score, steady income, and using one of their approved contractors. With good credit, their application process is designed to be fast and easy.
The minimum credit score to qualify for a GreenSky loan is 620. Some contractors may allow scores slightly under 620, but your interest rate will be higher.
GreenSky offers financing directly to customers of approved contractors in home improvement industries like HVAC, windows, roofing, solar, and more. The contractor initiates the loan application on their customer’s behalf.
Also Read: Comparison Between Closet World And California Closets.
The Verdict
As you can see, Hearth and GreenSky both provide viable home improvement financing options that can be tailored to your situation.
Here are a few final tips for choosing between them:
- If your credit score is under 620, Hearth is likely your only option
- For large renovations over $65,000, consider Hearth for higher loan amounts
- GreenSky offers lower rates and fees for borrowers with good credit
- Pick the lender that offers the most favorable loan terms and eligibility
Taking the time to understand these key differences allows you to make an informed decision on financing to start your home improvement projects sooner.
